question_answer

Assertion (A) :

As an appropriation. Interest on capital is allowed only when there is profit, but in case of loss, interest on capital is not given to any partner.

Reason (R) :

Interest on capital can be allowed as a charge, in such case, it will be allowed even if firm is in loss.

Choose the Correct Option from the following:

A) Assertion and Reason both are correct and Reason is the correct explanation of assertion

B) Assertion and Reason both are correct but Reason is not correct explanation of assertion

C) Only Assertion is correct

D) Reason is correct but Assertion is not correct